EXHIBIT 10.7
FIRST AMENDMENT TO CREDIT AGREEMENT
FIRST AMENDMENT, dated as of September 2, 2003 (this
"Amendment"), to the $1,310,000,000 Credit Agreement, dated as of November 12,
2002 (as heretofore amended, supplemented or otherwise modified, the "Credit
Agreement"), among CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a Texas limited
liability company ("Borrower"), the banks and other lenders from time to time
parties thereto (the "Banks"), and CREDIT SUISSE FIRST BOSTON acting through its
Cayman Islands Branch, as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H :
WHEREAS, Borrower, the Banks, and the Administrative Agent are
parties to the Credit Agreement; and
WHEREAS, Borrower has requested that the Supermajority Banks
agree to amend certain provisions contained in the Credit Agreement, and the
Supermajority Banks and the Administrative Agent are agreeable to such request
upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises herein
contained and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein,
capitalized terms used herein which are defined in the Credit Agreement are used
herein as therein defined.
2. Amendments to Definition of Excluded Transactions in
Section 1.1 of the Credit Agreement. The definition of "Excluded Transactions"
in Section 1.1 of the Credit Agreement is hereby amended as follows:
(a) Each word "Indebtedness" therein is hereby deleted
and replaced with the phrase "Indebtedness for Borrowed Money";
(b) Clause (a) thereof is hereby deleted and replaced
with new clause (a) as follows:
"(a) Indebtedness for Borrowed Money in respect of any
refinancing, refundings, renewals or extensions (on or prior to the
maturity thereof) of Indebtedness for Borrowed Money outstanding on the
Closing Date (without any increase in the principal amount thereof plus
any expenses (including any redemption premium or penalty) or any
shortening of the final maturity thereof to a date earlier than the
earlier of (i) the maturity date thereof in effect on the effective
date of the First Amendment to this Agreement and (ii) November 11,
2007);"
(c) The phrase "$300,000,000" in clause (k) thereof is
hereby deleted and replaced with the phrase "$800,000,000".
3. Amendment to Definition of Net Cash Proceeds in
Section 1.1. of the Credit Agreement. The definition of "Net Cash Proceeds" in
Section 1.1 of the Credit Agreement is hereby amended by deleting clause (b)
thereof in its entirety and replacing it with a new clause (b) as follows:
"(b) in connection with any issuance or sale of Capital Stock
or any incurrence of Indebtedness for Borrowed Money, the cash proceeds
received from such issuance or incurrence, net of (i) attorney's fees,
investment banking fees, accountants' fees, underwriting discounts,
escrow fees, reserves, related swap costs and commissions and other
customary fees and expenses actually incurred in connection therewith
and other similar payment obligations resulting therefrom (other than
the obligations under this Agreement) that are required to be paid
concurrently or otherwise as a result of such issuance or incurrence
and (ii) other amounts that are to be refinanced or refunded as
described in clause (a) of the definition of Excluded Transactions or
otherwise paid with all of part of the proceeds thereof."
4. Amendment to Section 5.6(a) of the Credit Agreement.
Section 5.6(a) of the Credit Agreement is hereby amended by deleting the word
"Indebtedness" therein and replacing it with the phrase "Indebtedness for
Borrowed Money".
5. Addition of New Section 5.9 to the Credit Agreement.
A new Section 5.9 is hereby added to the Credit Agreement as follows:
"Section 5.9. Borrower's Option to Effect Defeasance or
Covenant Defeasance.
The Borrower may elect, at its option at any time, to have
Section 5.9(b)or (c) applied to the Notes, upon compliance with the
conditions set forth below in this Section 5.9. Any such election shall
be evidenced by delivery by the Borrower to the Administrative Agent of
a certificate stating that the Borrower has made such election.
(b) Defeasance and Discharge. Upon the Borrower's exercise of
its option to have this Section 5.9(b) applied to the Notes, the
Borrower shall be deemed to have been discharged from its obligations
with respect to such Notes as provided in this Section 5.9(b) on and
after the date the conditions set forth in Section 5.9(d) are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Borrower shall be deemed to have paid and discharged the
entire indebtedness represented by such Notes and to have satisfied all
its other obligations under such Notes, this Agreement and the other
Loan Documents insofar as such Notes are concerned (and the
Administrative Agent, at the expense of the Borrower, shall execute
proper instruments acknowledging the same, including without
limitation, a discharge of the Pledge Agreement), subject to the
following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of the Banks to receive, solely from the
trust fund described in Section 5.9(d) and as more fully set forth in
such Section 5.9(d), payments in respect of the principal of and any
premium and interest on their Notes when
payments are due, (ii) the rights, powers, trusts, duties and
immunities of the Administrative Agent and the Collateral Trustee
hereunder and (iii) this Section 5.9. Subject to compliance with this
Section 5.9, the Borrower may exercise its option to have this Section
5.9(b) applied to the Notes notwithstanding the prior exercise of its
option to have Section 5.9(c) applied to such Notes.
(c) Covenant Defeasance. Upon the Borrower's exercise of its
option to have this Section 5.9(c) applied to the Notes, (i) the
Borrower shall be released from its obligations under any covenants
under Article V (other than Section 5.9) and Articles VII and VIII and
(ii) the occurrence of any event specified in Article 9, shall be
deemed not to be or result in an Event of Default on and after the date
the conditions set forth in Section 5.9(d) are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that the Borrower may omit to comply with and shall
have no liability in respect of any term, condition or limitation set
forth in any such specified Section, whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by
reason of any reference in any such Section to any other provision
herein or in any other document, but the remainder of this Agreement
and such Notes shall be unaffected thereby.
(d) Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to the application of Section 5.9(b)
or Section 5.9(c) to the Notes:
(i) The Borrower shall irrevocably
have deposited or caused to be deposited in a
segregated trust account for the exclusive benefit
of the Banks with a nationally recognized trust
company, bank or financial institution selected by
the Borrower having at least $10 billion in trust
assets at the time of such deposit, that agrees to
comply with the provisions of this Section 5.9
applicable to it (the "Collateral Trustee") as trust
funds in trust for the purpose of making the
following payments, specifically pledged as security
for, and dedicated solely to, the benefits of the
Banks holding the Notes, (A) money in an amount, or
(B) U.S. Government Obligations which through the
scheduled payment of principal and interest in
respect thereof in accordance with their terms will
provide, not later than one day before the due date
of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of
independent certified public accountants expressed
in a written certification thereof delivered to the
Administrative Agent, to pay and discharge, and
which shall be applied by the Collateral Trustee to
pay and discharge, the principal of and any premium
and interest on the Notes on the respective stated
maturities, in accordance with the terms of this
Agreement and such Notes. As used herein, "U.S.
Government Obligation" means (x) any security which
is (i) a direct obligation of the United States of
America for the payment of which the full faith and
credit of the United States of America is pledged or
(ii) an obligation of a Person controlled
or supervised by and acting as an agency or
instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United
States of America, which, in either case (i) or
(ii), is not callable or redeemable at the option of
the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933 as amended) as custodian
with respect to any U.S. Government Obligation which
is specified in clause (x) above and held by such
bank for the account of the holder of such
depositary receipt, or with respect to any specific
payment of principal of or interest on any U.S.
Government Obligation which is so specified and
held, provided that (except as required by law) such
custodian is not authorized to make any deduction
from the amount payable to the holder of such
depositary receipt from any amount received by the
custodian in respect of the U.S. Government
Obligation or the specific payment of principal or
interest evidenced by such depositary receipt.
(ii) In the event of an election to
have Section 5.9(b) apply to the Notes, the Borrower
shall have delivered to the Administrative Agent an
opinion of its counsel stating that (A) the Borrower
has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since
the date of this instrument, there has been a change
in the applicable federal income tax law, in either
case (A) or (B) to the effect that, and based
thereon such opinion shall confirm that, the Banks
holding the Notes will not recognize gain or loss
for federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected
with respect to such Notes and will be subject to
federal income tax on the same amount, in the same
manner and at the same times as would be the case if
such deposit, Defeasance and discharge were not to
occur.
(iii) In the event of an election to
have Section 5.9(c) apply to the Notes, the Borrower
shall have delivered to the Administrative Agent an
opinion of counsel to the effect that the Banks
holding the Notes will not recognize gain or loss
for federal income tax purposes as a result of the
deposit and Covenant Defeasance to be effected with
respect to the Notes and will be subject to federal
income tax on the same amount, in the same manner
and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur.
(iv) No event which is, or after notice
or lapse of time or both would become, an Event of
Default with respect to the Notes shall have
occurred and be continuing at the time of such
deposit or, with regard to any such event specified
in Sections 9.1(g) and
(h), at any time on or prior to the 90th day after
the date of such deposit (it being understood that
this condition shall not be deemed satisfied until
after such 90th day).
(v) Such Defeasance or Covenant
Defeasance shall not result in a breach or violation
of, or constitute a default under, any other
agreement or instrument to which the Borrower is a
party or by which it is bound.
(vi) The Borrower shall have delivered
to the Administrative Agent an officers' certificate
and an opinion of counsel, each stating that all
conditions precedent with respect to such Defeasance
or Covenant Defeasance have been complied with, and
such opinion shall state, subject to customary
exceptions, that the deposit made pursuant to
Section 5.9(d)(i) shall have created in favor of the
Collateral Trustee for the benefit of the Banks a
first priority perfected security interest in such
deposit to secure the Notes.
(e) Discharge of Pledged Bond and Pledge Agreement and
Acknowledgment of Discharge By Administrative Agent. Subject to Section
5.9(g) below and after the Borrower has delivered to the Administrative
Agent an officers' certificate and an opinion of counsel, each stating
that all conditions precedent referred to in Section 5.9(d) relating to
the defeasance or satisfaction and discharge, as the case may be, of
this Agreement have been complied with, the Pledged Bond and the Pledge
Agreement shall be automatically discharged notwithstanding anything to
the contrary contained therein (including Section 12 of the Pledge
Agreement) or in the documents executed in connection therewith and the
Administrative Agent shall notify the Trustee (as defined in the Pledge
Agreement) of such discharge and upon request of the Borrower shall
acknowledge in writing the defeasance or the satisfaction and
discharge, as the case may be, of this Agreement and the discharge of
the Borrower's obligations under this Agreement and the other Loan
Documents and the Administrative Agent shall return the Pledged Bond to
the Borrower and execute and deliver any instruments reasonably
requested by the Borrower to evidence the discharge of the Pledged
Bonds and the Pledge Agreement.
(f) Deposited Money and U.S. Government Obligations to Be Held
in Trust; Miscellaneous Provisions. All money and U.S. Government
Obligations (including the proceeds thereof) deposited with the
Collateral Trustee pursuant to Section 5.9(d) in respect of the Notes
shall be held in trust and applied by the Collateral Trustee, in
accordance with the provisions of the Notes and this Agreement, to the
payment, either directly or through any such agent as the Collateral
Trustee may determine, to the Banks holding such Notes, of all sums due
and to become due thereon in respect of principal and any premium and
interest, but money so held in trust need not be segregated from other
funds except to the extent required by law.
The Borrower shall pay and indemnify the Collateral Trustee
against any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to Section 5.9(d) or the
principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the holders
of outstanding Notes.
Anything in this Section 5.9 to the contrary notwithstanding,
the Collateral Trustee shall deliver or pay to the Borrower from time
to time upon Borrower's request any money or U.S. Government
Obligations held by it as provided in Section 5.9(d) with respect to
the Notes which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Collateral Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect
the Defeasance or Covenant Defeasance, as the case may be, with respect
to such Notes.
Any money deposited with the Administrative Agent, in trust
for the payment of the principal of or any premium or interest on the
Note and remaining unclaimed for two years after such principal,
premium or interest has become due and payable may be paid to the
Borrower on Borrower's request, or (if then held by the Borrower) shall
be discharged from such trust; and the holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Borrower
for payment thereof, and all liability of the Collateral Trustee with
respect to such trust money, and all liability of the Borrower as
trustee thereof, shall thereupon cease; provided, however, that the
Collateral Trustee, before being required to make any such repayment,
may at the expense of the Borrower cause to be published once, in a
newspaper published in the English language, customarily published on
each Business Day and of general circulation in The City of New York,
notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date
of such publication, any unclaimed balance of such money then remaining
will be repaid to the Borrower.
(g) Reinstatement. If the Collateral Trustee is unable to
apply any money in accordance with this Section 5.9 with respect to any
Notes by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such
application, then the obligations under this Agreement and such Notes
from which the Borrower has been discharged or released pursuant to
Section 5.9(b) or 5.9(c) shall be revived and reinstated as though no
deposit had occurred pursuant to this Section 5.9 with respect to such
Notes, until such time as the Collateral Trustee is permitted to apply
all money held in trust pursuant to Section 5.9(f) with respect to such
Notes in accordance with this Section 5.9; provided, however, that if
the Borrower makes any payment of principal of or any premium or
interest on any such Note following such reinstatement of its
obligations, the Borrower shall be subrogated to the rights (if any) of
the Banks holding such Notes to receive such payment from the money so
held in trust."
6. Addition of a New Section 5.10 to the Credit
Agreement. A new Section 5.10 is hereby added to the Credit Agreement as
follows:
"The Borrower shall not, without the prior consent of the
Majority Bank, prepay any Indebtedness for Borrowed Money issued after
the effective date of the First Amendment to this Agreement and secured
pursuant to Section 8.2(b)(iv) other than in connection with a
refinancing, refunding, renewal or extension thereof described in
clause (a) of the definition of Excluded Transactions."
7. Amendment to Section 8.2(b)(iv) of the Credit
Agreement. Section 8.2(b)(iv) of the Credit Agreement is hereby amended by
deleting the phrase "$300,000,000" in such Section and replacing such phrase
with the phrase "$800,000,000".
8. Conditions to Effectiveness. This Amendment shall
become effective as of the date set forth above upon satisfaction of the
following conditions precedent:
(a) The Administrative Agent shall have received
counterparts of this Amendment executed by Borrower and the
Supermajority Banks in accordance with Section 11.1 of the Credit
Agreement;
(b) The Borrower shall have paid fees to the Banks
executing this Amendment as previously agreed between the Borrower and
Banks;
(c) The Administrative Agent shall have received an
opinion of ▇▇▇▇▇ ▇▇▇▇▇ LLP and ▇▇▇▇▇ ▇. ▇▇▇▇▇, Deputy General Counsel
of the Borrower, addressing the Borrower's existence, the due execution
and delivery by the Borrower of this Amendment, the enforceability
against the Borrower of its obligations thereunder and absence of
conflicts with this Amendment with the charter documents and material
agreements of the Borrower;
(d) The Administrative Agent shall have received a
certificate of the Borrower stating that the representations and
warranties made by it in Article VII of the Credit Agreement and
otherwise in the Loan Documents to which it is a party as if made as
the date hereof (except to the extent such representations and
warranties are limited to a prior date); and
(e) All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with this
Amendment shall be in form and substance reasonably satisfactory to the
Administrative Agent.
9. Reference to and Effect on the Loan Documents;
Limited Effect. On and after the date hereof and the satisfaction of the
conditions contained in Section 8 of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby. The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Bank or the Administrative Agent
under any of the Loan Documents, nor constitute a waiver of any provisions of
any of the Loan Documents. Except as expressly amended herein, all of the
provisions and covenants of the Credit Agreement and the other Loan Documents
are and shall
continue to remain in full force and effect in accordance with the terms thereof
and are hereby in all respects ratified and confirmed.
10. Representations and Warranties. Borrower, as of the
date hereof and after giving effect to the amendment contained herein, hereby
represents and warrants that no Default or Event of Default has occurred and is
continuing and confirms, reaffirms and restates the representations and
warranties made by it in Article VII of the Credit Agreement and otherwise in
the Loan Documents to which it is a party as if made as the date hereof (except
to the extent such representations and warranties are limited to a prior date);
provided that each reference to the Credit Agreement therein shall be deemed to
be a reference to the Credit Agreement after giving effect to this Amendment.
11. Counterparts. This Amendment may be executed by one
or more of the parties hereto in any number of separate counterparts (which may
include counterparts delivered by facsimile transmission) and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Any executed counterpart delivered by facsimile transmission shall
be effective as an original for all purposes hereof. The execution and delivery
of this Amendment by any Bank shall be binding upon each of its successors and
assigns (including Transferees of its Commitments and Loans in whole or in part
prior to effectiveness hereof) and binding in respect of all of its Commitments
and Loans, including any acquired subsequent to its execution and delivery
hereof and prior to the effectiveness hereof.
12. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their duly authorized officers as of the date first
written above.
CENTERPOINT ENERGY HOUSTON
ELECTRIC, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
Signature Page
First Amendment to CenterPoint Houston Electric,
LLC $1,310,000,000 Credit Agreement
CREDIT SUISSE FIRST BOSTON, acting through
its Cayman Islands Branch, as Administrative
Agent
By: /s/ S. ▇▇▇▇▇▇▇ ▇▇▇
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Name: S. ▇▇▇▇▇▇▇ ▇▇▇
Title: DIRECTOR
By: /s/ ▇▇▇▇ ▇'▇▇▇▇
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Name: ▇▇▇▇ ▇'▇▇▇▇
Title: DIRECTOR
CREDIT SUISSE FIRST BOSTON, as a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: DIRECTOR
By: /s/ [Illegible]
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Name: [Illegible]
Title: Director
Signature Page
First Amendment to CenterPoint Houston Electric,
LLC $1,310,000,000 Credit Agreement
GOVERNMENT EMPLOYEES INSURANCE
COMPANY, as a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President, Controller and
Chief Financial Officer
Signature Page
First Amendment to CenterPoint Houston Electric,
LLC $1,310,000,000 Credit Agreement
GENERAL REINSURANCE CORPORATION, as
a Bank
By: /s/ [Illegible]
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Name:
Title: